IndianOil to supply petroleum products to Reunion Island
Chandigarh   15-Jun-2013

The signing of an agreement between Indian Oil Corporation and the French island of Reunion for import and distribution of refined petroleum products marks a key milestone in the efforts of the Indian Ocean island to develop ties with India.

Located about half an hour's flight from Mauritius, the French territory of Reunion has been trying to develop its business and cultural relationship with India.

This is not just because of the fact that Persons of Indian Origin make up for over one third of the 800,000 strong population of the island. The main reason behind the island - an overseas region of France - seeking to develop closer ties with India is business.

As the European Union, and specially France, pass through an extremely turbulent economic crisis, the Reunion economy too has been suffering tremendously.

The island, which remains dependent upon the mainland for all essential supplies, also has a monopoly in petroleum distribution, with the Societe Reunionnaise de Produits Petrolier (SRPP) being the sole player.

The SRPP has become extremely unpopular with the local population due to extremely high prices and problems in distribution. This has resulted in strikes, protest and general discontent with the situation in the Reunion.

Hence, the proposed deal with IndianOil is extremely crucial. This declaration of intent comes after months of discussions between Didier Roberts, the president of the Region, and Ravinder Sareen, chairman of IndianOil, which will import, stock and distribute petroleum products there.

"My first objective after taking charge in 2010 was to fight against the rising cost of living and the monopolies that exist in our island, especially in the essential items such as petrol or diesel. This agreement today should help in boosting competition as well as the purchasing power of the people of Reunion," said Didier Roberts, currently on an official visit to Tamil Nadu.

Though this action of going overseas for help may be seen as controversial in the mainland, it shows the commitment of the regions of France to deploy all possible means to fight the economic crisis and ease the impact of a declining purchasing power.

"This alliance today has to be seen in the right perspective. The island has been hit by a strike of petrol stations who are threatened by a declining margin and the anger is rising in the streets," said Jean Regis Ramasamy, a journalist member of the delegation from the Reunion.

"The region has been subsidising the fuel to ease the pressure on the common man but this is not viable in the long term and a solution had to be found."

The agreement could see the entry of the first ever Indian petroleum company entering the French market.